PG&E to end carbon offset plan after few sign on

UTILITIES

Published 4:00 am, Friday, November 11, 2011

Pacific Gas and Electric Co.'s ClimateSmart program, which lets the utility's customers go "carbon neutral" for a price, will close at the end of the year after signing up far fewer people than expected.

Begun in 2007, ClimateSmart gives participants a way to offset greenhouse gas emissions from the power plants that supply their electricity.

PG&E customers who joined the program pay a little extra on their monthly bills - about $3.30 for a typical homeowner. PG&E uses the money to fund projects that fight the buildup of greenhouse gases in the atmosphere, such as preserving forests from logging or capturing methane from cow manure.

But the program attracted just a fraction of the roughly 168,000 customers that PG&E predicted. Enrollment peaked in 2008 at just under 31,000. By the end of last year, it had slipped to 29,623.

ClimateSmart was created as a three-year experiment, and California energy regulators extended it until the end of this year despite concerns about weak participation. PG&E did not seek a second extension, said company spokeswoman Katie Romans.

The program, she said, accomplished its most important goal, reducing greenhouse gas emissions by 1.3 million metric tons. Participants contributed a total of about $10 million over four years, she said.

"It was a demonstration program, and it's successfully concluding after meeting its goals," Romans said. "Certainly we would have loved for more customers to have participated."

Those who did will receive a notice in their November utility bills thanking them for joining the program. The company also posted a notice on its website last week saying the program will end this year.

For much of its brief history, ClimateSmart was dogged by criticism that it wasted PG&E customers' money. Although participation in the program was voluntary, all of the utility's customers paid for its administrative and marketing costs, which totaled $16.3 million for the entire four-year run.

Critics also questioned whether the money coming from participants actually made a difference.

A report this year by the nonprofit news organization California Watch argued that some of the forest projects funded by ClimateSmart had already received taxpayer money from the state government, meaning PG&E customers paid twice for the same forests. PG&E insisted that the money from ClimateSmart helped save more trees and sequester more carbon dioxide than would the state funding alone.

In addition, under rules imposed by the California Public Utilities Commission, PG&E was obliged to hit the program's target of cutting greenhouse gases by 1.3 million metric tons even if the money collected from participants wasn't enough to reach that goal. Any shortfall would have to be covered by PG&E shareholders, said Matt Freedman, staff attorney for The Utility Reform Network. So contributions from ClimateSmart participants merely reduced the amount of money PG&E itself would have to spend on greenhouse gas reductions, he said.

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"We're not opposed to giving customers choices that will improve their environmental footprint," Freedman said. "But you have to look very carefully at what's being offered to see if it will make a meaningful difference."

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